JD Edwards says Oracle is anti-competitive
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Oracle's hostile bid for PeopleSoft is likely to be blocked on anti-trust grounds, according to the chief executive of J D Edwards, whose company last week agreed to sell itself to PeopleSoft.
Last week the ERP (Enterprise Resource Planning) sector was shaken from its normal torpor when an agreed off from PeopleSoft to buy mid-market enterprise aps vendor J D Edwards for $1.7 billion in stock was followed up by a hostile cash bid of $5.1 billion from Oracle for rival PeopleSoft.
Bob Dutkowsky, chairman, president and chief executive of J D Edwards, today characterised Oracle's "financially motivated" bid as "risky" and likely to lead to months of investigation by anti-trust investigators at either the US Department of Justice or European Union or both.
"There is a high likelihood that one or both of these bodies may block the bid," according to Dutkowsky.
Dutkowsky contrasted the "customer-driven" and "complementary" marriage of JD Edwards and PeopleSoft with Oracle's plans to reduce customer choice and product support should its audacious raid on PeopleSoft succeed.
Oracle says it will cease development of PeopleSoft enterprise apps and migrate customers to Oracle applications if its bid succeeds
bid find favour with PeopleSoft shareholders.
According to Oracle, its bid makes sense because both J D Edwards and PeopleSoft are "financially distressed". In a press conference at the start of J D Edwards annual Quest Global user conference in Denver today, Dutkowsky batted away this accusation. Although it "stumbled" in its last quarter, J D Edwards recorded six profitable quarters prior to that and the company remains "extremely solid financially".
Meanwhile executives at PeopleSoft wasted no time in pouring scorn on Oracle's overtures.
PeopleSoft President and CEO Craig Conway last Friday described Oracle's cash tender offer as "atrociously bad behaviour from a company with a history of atrociously bad behaviour".
Obviously it is a transparent attempt to disrupt the acquisition of J.D. Edwards by PeopleSoft announced earlier this week," he thundered.
PeopleSoft and its Board of Directors is required by law to review all cash tenders regardless of intent, and will provide a definitive recommendation to shareholders shortly. In the meantime, PeopleSoft advises it shareholders to take no immediate action. ®